Correlation Between Cisarua Mountain and Dayamitra Telekomunikasi

Can any of the company-specific risk be diversified away by investing in both Cisarua Mountain and Dayamitra Telekomunikasi at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cisarua Mountain and Dayamitra Telekomunikasi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cisarua Mountain Dairy and Dayamitra Telekomunikasi PT, you can compare the effects of market volatilities on Cisarua Mountain and Dayamitra Telekomunikasi and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cisarua Mountain with a short position of Dayamitra Telekomunikasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisarua Mountain and Dayamitra Telekomunikasi.

Diversification Opportunities for Cisarua Mountain and Dayamitra Telekomunikasi

0.78

Correlation Coefficient

Cisarua Mountain  Dayamitra Telekomunikasi

Poor diversification

The 3 months correlation between Cisarua and Dayamitra is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cisarua Mountain Dairy and Dayamitra Telekomunikasi PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dayamitra Telekomunikasi and Cisarua Mountain is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cisarua Mountain Dairy are associated (or correlated) with Dayamitra Telekomunikasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dayamitra Telekomunikasi has no effect on the direction of Cisarua Mountain i.e., Cisarua Mountain and Dayamitra Telekomunikasi go up and down completely randomly.

Pair Corralation between Cisarua Mountain and Dayamitra Telekomunikasi

Assuming the 90 days trading horizon Cisarua Mountain Dairy is expected to under-perform the Dayamitra Telekomunikasi. In addition to that, Cisarua Mountain is 1.29 times more volatile than Dayamitra Telekomunikasi PT. It trades about -0.14 of its total potential returns per unit of risk. Dayamitra Telekomunikasi PT is currently generating about -0.14 per unit of volatility. If you would invest  66,000  in Dayamitra Telekomunikasi PT on December 24, 2024 and sell it today you would lose (10,000) from holding Dayamitra Telekomunikasi PT or give up 15.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Cisarua Mountain Dairy  vs.  Dayamitra Telekomunikasi PT

Cisarua Mountain Dairy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cisarua Mountain Dairy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Dayamitra Telekomunikasi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dayamitra Telekomunikasi PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Cisarua Mountain and Dayamitra Telekomunikasi

The main advantage of trading using opposite Cisarua Mountain and Dayamitra Telekomunikasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisarua Mountain position performs unexpectedly, Dayamitra Telekomunikasi can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dayamitra Telekomunikasi will offset losses from the drop in Dayamitra Telekomunikasi's long position.

The idea behind Cisarua Mountain Dairy and Dayamitra Telekomunikasi PT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..